Transport Costs Fall on Farmers

Analysis performed on behalf of the Soy Transportation Coalition provides compelling evidence that farmers, more than any other segment of agriculture, are responsible for paying the transportation costs from the farm to the dinner plate. A study performed by O’Neil Commodity Consulting examined 36 soybean loading facilities across seven states and analyzed the relationship among origin basis, destination basis and transportation costs.

The study found that as transportation costs rise, origin basis diminishes. When the interior basis for soybeans in Nauvoo, Ill., for example, jumps from –21 to –78 during the course of four years (2005 to 2008), the Illinois farmer is clearly taking the brunt of any increase in local elevator margins and transportation cost, notes Dean Campbell, a soybean producer from Coulterville, Ill., and former chair of the Soybean Transportation Coalition.

During the same four-year period, the destination basis at the Gulf of Mexico increased from +45 to +48. The same scenario has played out for farmers in Indiana, South Dakota, Nebraska and all other soybean-producing states.

"This is why farmers should be among the leading advocates for a well-maintained, reliable transportation system," Campbell says.